The fundamental effects of ESG disclosure quality in boosting the growth of ESG investing

Hui Wen, Ken C. Ho, Jijun Gao and Li Yu

Journal of International Financial Markets, Institutions and Money, 2022, vol. 81, issue C

Abstract: This paper investigates the link between firms’ ESG disclosure quality and the growth of ESG investment based on a cross-country/region firm-level panel dataset. We find evidence supporting moderating effects of ESG disclosure quality on increasing firms’ Tobin’s Q, ROA, and reducing downside risks. ESG disclosure quality has a larger effect on enlarging the ESG investment scale, accelerating the growth of ESG investing and promoting the ESG investment more dispersed among all firms in mandatory CSR reporting countries/regions compared with other countries/regions. Our findings also suggest the importance of good and continuing good ESG disclosure quality for firms to benefit from implementing ESG practices.

Keywords: ESG disclosure; ESG investing; CSR reporting regulation; Market value; Financial returns; Downside risk (search for similar items in EconPapers)
JEL-codes: G11 G23 G32 G34 G38 M14 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:81:y:2022:i:c:s1042443122001275

DOI: 10.1016/j.intfin.2022.101655

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